Swiss Army Participation A7 (1)
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Swiss Army Participation A7
What is the problem statement in this case?
The problem in this case is that Urs Wyss, the marketing head at Victorinox, must
assess how Victroinox should deal with the acquired Wenger fragrance unit. Wyss is
assessing whether the company should design a business strategy to enter the
fragrance industry, diversify into the fragrance business and how, should the firm
attempt to transfer existing brand attributes to fragrance products or should they sell
fragrances under another brand name? How can they best compete and position
themselves in this mature and competitive industry.
Write pros and cons of brand extension strategy in this case; use of Victorinox or
Swiss Army brand for the fragrances.
One pro of using the existing Victrinox or Swiss Army brand names is that it can
increase acceptability of the new product which in this case is fragrances.These
brands are already well known and associated with high quality, durability and luxury
and trusted by many consumers. A second pro of using an already established brand
name to launch the fragrance is there would be reduced costs associated with brand
development and introductory marketing and follow-up marketing initiatives. A third
pro is that, if successful, the fragrance could enhance the parent brand’s image while
increasing market coverage by attracting old and new consumers. One con of
launching the fragrance under one of the existing brand names is that they may be
unrelated products which would create a loss of reliability for the parent brand and
product. Another con is that the new product may cause damage to the parent brand
image. Another con is there's a chance the fragrance receives less awareness and
trial than it would if it were launched under its own brand name.
This also would reduce many costs such as introductory marketing cots and n
What should Victorinox do with the newly acquired fragrance business unit?
(Diversification? Family brand? Individual brand?) Explain your recommendation.
Victrinox is a very reputable company and adding an unrelated product like
fragrances under one of its current name brands could have a negative
consequence on the company as a whole which is why I advise them to launch the
fragrances under the name “Swiss Army Fresh” rather than Victorinox Fragrances or
a new name entirely because swiss army products are associated with durability and
luxury which can be used to market their new fragrance brand. I think the product
should have limited releases since it is less well known and will need time to be
adopted as well as to create exclusivity and scarcity. They could use multifunctional
packaging for the fragrance or leverage Switzerland as a beauty and refreshing. The
use of swiss army name also helps position the fragrances as luxury since swiss
army is typically viewed as high end. Using an individual brand also allows them to
focus on targeting gen Y as they have the largest interest in fragrances and beauty
products rather than fitting into current brand position strategies. By using value
based pricing they can attract gen Y that tend to seek good quality for a good price.
There are major competitors in the industry and the consumers are brand-conscious
which is why the use of the popular reliable swiss army name can give them an
advantage compared to unknown startups.
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